TaxTMI 
TaxTMI 
2016 (11) TMI 392
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....at the assessee filed its return of income for the A.Y. 2006-07 declaring the total income of (-) Rs. 70,53,440/-. The case was selected for scrutiny and assessment order was passed u/s 143(3) of the Act. It was noticed that the assessee had credited only the other income of Rs. 14,31,880/- in the P&L Account. Out of the said income the assessee had claimed profit on sale of fixed assets of Rs. 69,859/-, Profit on sale of investment of Rs. 2,50,150/- under the head 'income from capital gain' in the computation of income. The other receipts under the head 'other income' are interest, rent, sale of processing material, excess liabilities/provisions written back and miscellaneous. income. Against the same income, the assessee has claimed the e....
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....income derived by the assessee and the assessee has not carried out any business activity during the year under consideration for it to be eligible to claim business expenditure. 2. The CIT(A) further erred in holding that the business of appellant has not discontinued and it was merely suspension of business without proper justification, where in fact the manufacturing activity had been discontinued. 4. Before us the Authorised Representative (AR) submitted that the Ld CIT(A) has rightly allowed the claim of expenses. Further the Ld. CIT(A) has rightly held that the provisions of section 44AB of the Act are not applicable in view of the fact that assessee's gross turnover during the year under consideration was less than the prescribed....
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....ted and vouched by the tax auditor. The A.O has rightly allowed the expense of Rs. 1 Lakh to its status as a company. Hence, the impugned order is liable to be set aside. 6. We have heard the rival submissions and also perused the material placed before us including the case law relied upon by the parties. The only issue to be decided in the present case is whether in the given situation the assessee is entitled for deduction of expenditure claimed as business expenses by it? The Ld. CIT (A) has allowed the business expenses claimed by the assessee holding as under:- "5.5 I have considered the A.O.'s order as well as the appellant's A/R submission. I have also taken note of the case laws relied on by the appellant. Having considered both,....
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....e A.O. was not justified in making this disallowance. Accordingly these grounds of appeal are allowed." 7. The Ld. CIT(A) has observed that the A.O has neither given any finding to substantiate the disallowance, nor has pointed out any specific instance to justify the said disallowance. On the other hand, the appellant itself has disallowed the sum of Rs. 1,02,76,653/- while computing the income filed with the return of income. As contended by the assessee, the books of account are audited by the statutory auditors and the said auditors have not pointed out any defect in their report. 8. From the details of expenditure so incurred and claimed, we find that the assessee has merely claimed the expenses which are necessary to retain the est....
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....f the case, having held that the assessee was not carrying on any business, the Tribunal was legally correct in allowing the entire expenses of Rs. 11,295/- in the AY1969-70 and Rs. 10,613 in the AY 1970-71 except in so far as it can be related to the income from property? The Hon'ble Court answered the question in affirmative in favour of the assessee and against the revenue holding that Tribunal has on facts held that the expenditure claimed by the assessee was claimed only for the purpose of keeping the company alive and the expenditure incurred for retaining the status of the company, namely, miscellaneous expenses, salary, legal expenses, travelling expenses etc. would be expended wholly and exclusively for the purpose of making or ear....